Correlation Between Magnora ASA and Cairo Communication
Can any of the company-specific risk be diversified away by investing in both Magnora ASA and Cairo Communication at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Magnora ASA and Cairo Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnora ASA and Cairo Communication SpA, you can compare the effects of market volatilities on Magnora ASA and Cairo Communication and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Magnora ASA with a short position of Cairo Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnora ASA and Cairo Communication.
Diversification Opportunities for Magnora ASA and Cairo Communication
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Magnora and Cairo is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Magnora ASA and Cairo Communication SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cairo Communication SpA and Magnora ASA is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Magnora ASA are associated (or correlated) with Cairo Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cairo Communication SpA has no effect on the direction of Magnora ASA i.e., Magnora ASA and Cairo Communication go up and down completely randomly.
Pair Corralation between Magnora ASA and Cairo Communication
Assuming the 90 days trading horizon Magnora ASA is expected to generate 1.46 times more return on investment than Cairo Communication. However, Magnora ASA is 1.46 times more volatile than Cairo Communication SpA. It trades about 0.23 of its potential returns per unit of risk. Cairo Communication SpA is currently generating about 0.34 per unit of risk. If you would invest 2,245 in Magnora ASA on September 3, 2024 and sell it today you would earn a total of 260.00 from holding Magnora ASA or generate 11.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnora ASA vs. Cairo Communication SpA
Performance |
| Timeline |
| Magnora ASA |
| Cairo Communication SpA |
Magnora ASA and Cairo Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnora ASA and Cairo Communication
The main advantage of trading using opposite Magnora ASA and Cairo Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnora ASA position performs unexpectedly, Cairo Communication can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cairo Communication will offset losses from the drop in Cairo Communication's long position.| Magnora ASA vs. Catalyst Media Group | Magnora ASA vs. CATLIN GROUP | Magnora ASA vs. RTW Venture Fund | Magnora ASA vs. Secure Property Development |
| Cairo Communication vs. Catalyst Media Group | Cairo Communication vs. CATLIN GROUP | Cairo Communication vs. Magnora ASA | Cairo Communication vs. RTW Venture Fund |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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